What will your net worth be when you pass away?
It’s a question you may not like to think about, but it’s an important one nonetheless. For the average retiree, the median net worth is over $265,000. That’s no small piece of pie!
Deciding what happens to all of your “stuff” (i.e., money, homes, insurances, valuable art, cars and so on) is a process called estate planning. While some laws and regulations surrounding estate planning are the same across all of the U.S., states also have specific rules about what you can do as far as end-of-life and estate planning (and how you can do it).
For example, did you know that here in Oregon you don’t actually have to have a casket or coffin for burial? Or that your loved ones can DIY a death certificate?
While those examples are a little whacky, they illustrate just how much your home state can impact your end-of-life plans.
Today, we’re exploring eight common questions about estate planning in Oregon, from what happens if you pass away sans a will to specific estate tax laws and beyond.
8 Common Questions About Estate Planning in Oregon
1. What basic info should you know before creating a will in Oregon?
There are a few things to keep in mind when creating a will in Oregon:
- Oregon is not a community property state: Assets acquired during the marriage are not automatically considered joint property – which might affect how you choose to distribute your assets in your will.
- You’ll need at least two witnesses: Your will must be signed and dated by two adults (at least 18 years old). They must be competent and sign it within a reasonable timeframe before your death. You should also avoid witnesses that have an “interest” in your estate (i.e., beneficiaries).
- It doesn’t need to be notarized, but it may be a good idea: While Oregon law doesn’t require wills to be notarized, having your will notarized can sometimes make the probate process smoother. It’s best to consult with an attorney to determine whether notarization is appropriate for your situation.
We recommend you work with an attorney who has experience in estate planning. They can draft your documents, offer guidance and give you the peace of mind that your will is clear and legally unambiguous.
Additionally, there is a quick free will test available online you can take to find out how simple or complex your will should be, such as whether you may need to create an advanced healthcare directive (more on that below).
Related: Will Your Estate Plan Actually Protect Your Family?
Note that you can create a will on your own, but it’s not recommended as any “fuzzy” areas could lead to disputes between your beneficiaries or loved ones after you pass. If anything is unclear in your will and you’re not around to sort it out, it will likely end up in probate court.
2. What happens if you don’t have a will in Oregon?
If you don’t have a will in place, Oregon has intestate laws that determine what will happen to all of your “stuff.”
The succession rules go like this:
- Married with no surviving child > Spouse inherits everything
- Married and have children with your spouse > Your entire estate goes to your surviving spouse
- Have surviving children from another partner > Your surviving spouse could receive up to one-half of the estate, with remaining shares passed on to children.
Additionally, if your will is unclear or leaves out any assets, it could end up being decided by probate court.
When your estate goes to probate court, they will identify all of your assets and their values, notify any potential heirs and publish a notice to any creditors allowing them four months to announce any debts you may have owed. Usually, a personal representative is appointed to sort through and assign value to your items. The representative could be a family member, bank, lawyer or other person(s).
Then, your assets will be divided amongst your next of kin. If you have no surviving family members, it may be granted to the state of Oregon in a process called “escheating.”
In sum: If you have no will in place, then things are out of your hands and ultimately decided by the courts.
3. How do advance directives work in Oregon?
Advance directives guide your medical care in situations where you can’t decide yourself in the moment. In Oregon, this is called an Advance Directive for Health Care (ADHC).
To create an ADHC, you will need to name an individual who will have the authority to make your medical decisions, as well as an alternate and an overseeing health care representative. All of these individuals must sign off on the document, in addition to two other witnesses. Note that your chosen representative can revoke the ADHC at any time without warning.
Additionally, Oregon-based law office Collier Law states that some medical decisions are limited with an ADHC:
“The ADHC provides no authority relating to mental health treatment, convulsive treatment, psychosurgery, sterilization, and abortion. The health care representative also does not have authority over life-sustaining procedures unless specifically granted authority in the form.”
Advance Directives vs. Power of Attorney
An ADHC does not give your representative the power to make any financial decisions about your estate. However, you can make that appointment through a Power of Attorney (POA) document, which grants another individual the power to make decisions about your finances while you are still alive but are deemed incapacitated.
There is no law in Oregon stating that your designated POA and ADHC representative must be different individuals – so they often end up overlapping.
4. How should I leverage trusts as part of my estate plan in Oregon?
A trust is a document that holds your assets (property, money, etc.) for your benefit while you’re alive and distributes them according to your instructions after your death. Trusts can help to avoid probate court and can sometimes come with certain tax advantages.
For example, Oregon has estate taxes for estates over a certain amount. By moving some of your assets into a trust, you may be able to effectively “lower” your total estate value.
Related: What is a Trust and Why Might You Need One?
In a trust, you act as the “trustor” (creator) and can also be the “trustee” (manager) of the assets, or appoint someone else as trustee.
Another important distinction to keep in mind is that there are two main types of trusts: revocable (aka “living”) and irrevocable. A revocable trust goes into effect while you’re still alive and is generally better for avoiding hiccups in asset distribution after your death, while an irrevocable trust only kicks in after your passing.
5. Does Oregon have an estate tax?
Yes, Oregon has a tax on your estate’s total value if it surpasses $1 million at the time of your death. Assets included in that calculation are property, investments, cash and other valuables.
The tax rate ranges from 10% to 16% depending on your estate’s total value, and you’re allowed certain deductions for expenses like debts, funeral arrangements and charitable donations.
Keep in mind that the Oregon estate tax is separate from federal estate taxes, which apply to estates worth $13.61 million or more in 2024.
6. Does Oregon have an inheritance tax?
No, there is no inheritance tax in Oregon – the taxes apply only to your estate rather than your loved ones receiving assets. Oregon also does not tax gifts (although federal taxes apply to gifts over $18,000 per year per person).
Note that if you’re inheriting assets from someone who lived in another state, you may be subject to any tax rules from that state.
7. Who can serve as an executor of your estate in Oregon?
The executor of your estate must meet a few key requirements to qualify in Oregon. They must:
- Be 18 or older
- Be of sound mind
- Disclose any felony convictions to the relevant courts
If they are an attorney, they cannot have been suspended or disbarred when serving as executor, or resigning in the midst of an investigation against them. Generally, licensed funeral services practitioners are also off the table.
8. How do you get started with estate planning?
If you want to get started on creating your own estate plan, it’s a good idea to get in touch with a financial advisor who can act as the “quarterback” throughout the process and connect you with any other necessary professionals, like an estate planning attorney.
An advisor can also help you create a plan that encapsulates all your assets (like digital accounts) and factor in your life goals and unique values along the way.
Estate planning might seem like a big undertaking, but with the eight FAQs above answered and the right team of professionals on your side, you can create an estate plan that gives you and your loved ones the protection you need.
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